Tue January 14, 2014

The Young And Restless May Cause Drama For ACA

After a slow start, the Affordable Care Act is now attracting customers at a healthier pace. The government said yesterday that 2.2 million people have signed up for health insurance under the state and federal exchanges. But there's a serious red flag. A disproportionate number of new enrollees are middle aged or older.

Here's NPR's Jim Zarroli on what that means for the program and for insurers.

JIM ZARROLI, BYLINE: About 40 percent of the people who lack health insurance in the United States are between 18 and 35. But the Obama administration says only 24 percent of the people who've signed up for insurance under the Affordable Care Act, so far, fall into that age range. Yevgeniy Feyman, a fellow at the Manhattan Institute for Policy Research, says that's a potential problem.

YEVGENIY FEYMAN: What that's telling us is that young people are not going to the exchanges. They're probably not getting subsidies and the people who are enrolling are disproportionately older.

ZARROLI: It's a problem because older people have more health issues and an insurance pool that skews older will be more costly. Robert Zirkelbach is a spokesman for America's Health Insurance Plans.

ROBERT ZIRKELBACH: There's pretty broad agreement that for these reforms to work, there needs to be broad participation among the young and healthy to help balance out the cost of those who were older and have high health care costs.

ZARROLI: And with high health care costs, premiums will have to be higher says Yevgeniy Feyman.

FEYMAN: Even if it's a small difference, let's say it's 2, 3 percent. Two, 3 percent one year; 2, 3 percent another year; 2, 3 percent after that. And that adds up. That adds up quite a bit, especially if you tack it on to the existing medical cost inflation.

ZARROLI: Feyman acknowledges that it's probably too soon to panic. It's early yet and the enrollment pool is likely to change. Brian Haile, senior vice president for health policy at Jackson Hewitt Tax Service, says a lot of the people who rush to sign up for insurance in the first few months were replacing policies that had been cancelled. They were people already in the individual market.

BRIAN HAILE: When you look at the individual insurance market, it tends to skew a little older. So I'm not at all surprised that the enrollees who made up the 2.2 million that was announced yesterday also skewed older. It just reflects where they came from.

ZARROLI: There are a lot of younger people out there who haven't signed up for health insurance yet and probably haven't given the matter much thought. But if history is any guide, that will change. Robert Zirkelbach points to what happened in the state that pioneered mandatory health insurance.

ZIRKELBACH: The evidence for Massachusetts is that the young people tend to sign up later.

ZARROLI: Over the next few months, a lot of those young people will begin receiving their income tax refunds. And when they do, a lot of them will probably use them to buy health insurance, says Tim Jost, professor at Washington and Lee Law School.

TIM JOST: We still have three months for people to enroll or almost three months, and I think the numbers are going to look quite different by March 31st when open enrollment period ends than they look now.

ZARROLI: People who don't have health insurance will have to pay a fine, but the fine is small during the first year, and so young people may not readily see a reason to get policies. For the insurance industry the challenge over the next few months will be to find ways to persuade them that coverage is in their interest. If it can't do that, the cost of premiums and the cost to the U.S. government could become a lot higher. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.